Why are FCA-regulated advisers reluctant to sign financial forms?
You may need an FCA-regulated adviser to sign a financial form, but this may be trickier than you think. We look at some of the reasons why.
If you’re interested in optimising your finances and taking action by, for example, consolidating or transferring a pension, you may face an unwelcome roadblock when you need a financial form approved by an adviser.
We explore when you may need a financial adviser to sign a form and why they may hesitate.
Summary
- There are some scenarios where you need an adviser to sign a financial form, such as transferring certain pensions, as valuable benefits may be lost.
- A financial adviser will understand the implications of any financial decisions and ensure it is right for your circumstances.
- When signing a financial form, an adviser accepts some liability and may be accountable, which is why they may be reluctant to sign without fully understanding your situation.
What does a financial adviser do?
A financial adviser is an experienced professional who can help you make decisions with your money, whether it’s:
- Transferring or consolidating any pensions
- Building a retirement plan and deciding on how to access your pension
- Optimising your pension
- Estate planning, including inheritance tax considerations
- Reviewing your investment strategy and building a portfolio
- Advising on a mortgage or property aspirations
- Saving towards your money goals
A financial adviser must be qualified and regulated by the Financial Conduct Authority (FCA) and meet regulatory standards. Advisers can face action from the FCA for several reasons, including if they provide unsuitable advice or avoid their liabilities.
When it comes to signing financial forms, an adviser is confirming they have reviewed your circumstances and agreed the action is appropriate for your situation when they sign. It also means they accept some liability and may be held accountable should anything go wrong.
When would I need an adviser to sign a financial form?
There are many scenarios where you may need a financial adviser, especially if you want them to sign a form to approve a certain action.
For example, you legally need regulated financial advice if you plan to transfer a defined benefit pension in the UK or overseas or if it is worth more than £30,000.
Some pension providers may ask you to get financial advice if you have certain benefits, such as a guaranteed annuity rate, and even if your pension is worth less than £30,000.
As any pension transfer cannot be reversed, it’s vital you make an informed decision and get advice from a financial adviser who is regulated by the FCA, whether it is required or not.
You’ll also legally need to get regulated financial advice if you plan on using equity release
If you are consolidating your pensions, financial advice is strongly recommended but is not a legal requirement – unless your pensions have safeguarded benefits and are worth over £30,000.
Other scenarios where you may need an adviser to sign a form (but it may not be a legal requirement) include setting up a trust, accessing your pension, or making pension decisions in a divorce settlement.
Why do I need an adviser to sign my form?
You’ll need an adviser to sign a financial form to approve an action, but it’s much more than that.
By signing a form, you’re confirming you understand the implications of your actions and what you’re potentially giving up. However, there may be factors you have not considered, which is why you legally need a financial adviser to understand the implications fully.
It’s important to stress that the legal requirement to get financial advice for certain pension transfers was introduced alongside pension freedoms reforms in 2015, allowing you to flexibly access any money in your defined contribution pension.
So, with more freedoms, there’s also been greater regulation to ensure people make the right decisions for their circumstances and goals – and avoid missing out on valuable benefits.
For example, defined benefit pensions pay out a set income for life, which increases with inflation, while some older pensions offer guaranteed annuity rates, so you’ll likely get better rates than elsewhere.
As financial advisers are liable for signing these forms (as well as for their advice), this is one of the key reasons one may be reluctant to sign if they don’t understand your circumstances.
However, if you get financial advice from a regulated adviser prior to signing any forms, they can be confident you’re making the right decisions based on your circumstances and goals.
Why would a financial adviser be reluctant to sign a form?
Many advisers may refuse to sign a financial form without you using their services.
There are several reasons why, including:
- Little understanding of your situation: A financial adviser needs to understand your situation and goals to decide if a certain action is right for you. An adviser may need information about you and your family’s income, outgoings, pensions, tax liabilities, assets, and even your health (if relevant).
- Professional liability: By signing a financial form, an adviser supports your decision – so if something goes wrong, or it’s not seen as appropriate, they could face action from the FCA or even be sued.
- Duty of care: Financial advisers are responsible for their clients by ensuring they make informed decisions. If they don’t agree with the action and haven’t recommended it, this conflicts with their duty of care.
- It doesn’t align with their business model: Many advisers focus on providing long-term financial management rather than one-off services.
If you’re looking for a financial adviser to sign your form, there are steps you can take to improve your chances of getting it approved.
You should explain why you need a signature and if it must be signed by an adviser instead of another professional and be ready to share relevant information and evidence.
It’s also important to remember that requesting an adviser to sign your form could involve paying a fee.
Alternatively, if a financial adviser is unwilling to sign your form, you could find out how much it would cost to get expert advice in this specific area to ensure they are comfortable fulfilling your request.
Need expert financial advice?
Getting a vital form signed and approved by a financial adviser can be tricky, but this could be an opportunity to make sure you’re making the right decision for your circumstances.
A financial adviser can review your situation and goals and make recommendations.
Unbiased can match you with a qualified FCA-regulated financial adviser who can help you achieve your goals, whether you’re transferring a pension, considering equity release, or retirement planning.
:quality(20))